Georgia’s Liberal Governor

By Carole E. Scott

When he was growing up in Newnan, Ellis G. Arnall (1907-1992), Georgia’s governor from 1943 to 1947, "realized that the South was merely a colonial appendage of the imperial domain called the North; that the South was the economic doormat of the United States as Ireland was of the United Kingdom. Eastern and Northern writers had field days in steady criticism of the South, its poverty and problems."

According to Arnall, "after the Civil War, instead of rehabilitation, the North inflicted upon our people a program of retribution, discrimination, and restrictions. I determined that if ever the opportunity came I would do

something to bring about the readmission of the states of the South into our Union as equals with comparable economic and commercial opportunities...."

Because the South did not have the capital it needed to develop manufacturing, it was dependent on the North for capital. Northern investors concentrated on exploiting the South's plentiful natural resources. Northern owners of southern plants confined them to the crude processing of raw materials, shipping them North for final fabrication. Since the essence of this type of industry is the payment of low wages, the South was mired in poverty. Racial conflict, some believed, was the result of the fact that there was only "half a loaf of bread" available to divide between whites and blacks.

“I found," Arnall said, "that the only way the few textile mills in the South could stay in business competitively with their Northern counterparts was by paying low wages, requiring the workers to live in mill villages owned by the companies and requiring high rentals from the workers, requiring the workers to trade with the mill commissaries on credit terms which were much higher than offered by non-company stores, to use child labor and other devices which the mill owners did not want to employ but which were required for them to stay in business.

Arnall attributed the South's poverty in part to discriminatory railroad freight rates. He claimed that the higher railroad freight rates southern manufacturers had to pay precluded the manufacture of fine cotton textiles in the South. He noted that Georgia had not a single fine-goods bleachery.

Railroads’ rates were approved by a federal agency, the Interstate Commerce Commission (ICC). It cost northerner manufacturers less to ship manufactured goods to the South than it cost southerners to ship manufactured goods to the North, while it cost less to ship raw materials from the South to the North than to ship raw materials to the South from the North. This limited the South’s industrial production to unfinished, relatively heavy goods. Both northerners and southerners wanted to produce relatively light weight finished goods because profit margins are higher on them.

Freight rates on raw materials shipped from the South to the North were set so low that they amounted to a subsidy to manufacturers in the North, especially in parts of New England where obsolete plants might have to be refitted or junked if they did not enjoy in effect a subsidy on raw materials purchased from the South. The effect of the higher cost of shipping manufactured goods from the South to the North had the same effect on southern manufacturers as a domestic tariff--which it was illegal to levy--because this protected northern manufactures from competition from newer and more efficient manufacturers in the South.

Connecticut's governor claimed that one of the functions of the ICCwas to prevent substantial migration of industry from one region to another. Vermont’s governor feared that lower freight rates out of the South would enable Georgia's marble industry to destroy his state's marble industry.

Northerners claimed that the fact that manufacturers were moving to the South proved that higher freight rates did not harm the South. Southerners countered this by pointing out that the firms which were moving to the South were firms that the South's resources and cheap labor were vital. In 1943, New York Governor Thomas E. Dewey wrote that to readjust and equalize freight rates “would mean an increase in the cost of producingand manufacturing goods manufactured in New York State, which would make it more difficult for concerns to manufacture in New York State and make it more attractive for them to shift their manufacturing operations to the South....Industries have located, workers have made their homes in reliance upon the present rate structure.... I insist that the rate structure should not be changed.”

Arnall, who had been the director of President Franklin D.Roosevelt’s reelection campaign in the South, got a chance to do somethingaboutdiscriminatory railroad freight rates when he became governor of Georgia by defeating the incumbent governor, Eugene “Gene” Talmadge in 1942. Helping him defeat Talmadge was Talmadge having caused the University System of Georgia to lose its accreditation, which Arnall succeeded in restoring. As a result of the State’s constitution having been

changed,

Arnall was the first governor to be elected to a four year term. However, he was precluded by it from running for reelection. As governor, Armall established a teacher’s retirement system; created a merit system for state employees; abolished prisoner chain gangs; revised the state’s constitution; abolished the poll tax; made Georgia the first state to lower the voting age to 18; and eliminated the state’s $36 million debt without raising taxes.

Although he was critical of the much abused pardon power of the governor, he pardoned Robert Elliot Burns, whose book was the inspiration of a movie that made Georgia look bad: “I escaped froma Georgia chain gang”. Like Gene Talmadge, Arnall had campaigned as a segregationist. Arnallonce said that “the sun would not set” on the head of a black who tried to enroll in a white school in Coweta County. After his election, Arnall’spopularity plummeted when he did not defy a court order requiring the Democrats to allow blacks to vote in their primary.

Unable to get support from other southern states and western states

also handicapped by discriminatory freight rates to attempt to sue the railroads, in 1944, in tandem with a suit by the federal Department of Justice, Arnall filed with the U.S. Supreme Court on behalf of the State of Georgia a suit against the Pennsylvania Railroad and 22 other railroads. Requested was that the Court strike down a set of discriminatory freight rates that favored the manufacturers of one part of the nation at the expense of the others. The railroads were accused of being part of a conspiracy to discriminate on freight rates which averaged 39 percent higher on manufactured goods shipped from the South to the North than those shipped from the North to the South.

The lack of support from other southern governors has been blameon the fact that, due to complaints made by the South’s governors and members of Congress, for several years the ICC had been studying regional differences in freight rates, and that was enough for Arnall’s peers. Not long after the Supreme Court agreed to accept Arnall's case, the ICC announced that it had decided the higher rates in the South and West constituted undue and unreasonable prejudice and disadvantage; therefore, they violated the Interstate Commerce Act. Arnall and many others thought the ICC’s decision was a reaction to the Supreme Court having accepted Arnall’s case.

A Republican-dominated Congress passed over President Harry Truman’s veto a bill exempting railroads from the Sherman Anti-trust Act. This did not, as northerners hoped, preserve discriminatory freight rates. In 1947, the Supreme Court upheld the ICC’s decision. However, it was not until 1952 that rates were equalized.

Due to the use of the county unit system, back then whoever was selected in Georgia’s Democratic primary as the party’s nominee for governor always won the general election. Voters in the state’s larger counties were discriminated against in the primary because who won was determined, not by how many people voted for a candidate, but by how many “county unit” votes a candidate received. A candidate who received a majority of the votes in an “urban” county got 6 county unit votes. The winner of a “town” county got 4 county unit votes. The winner of a “rural” county received 2 votes. The county unit system saved the day for Gene Talmadge in the 1946 Democratic primary because although, thanks to his popularity in urban counties, more people voted for businessman Jimmie Carmichael than for Talmadge, red gallus snapping Gene raked in enough 2-unit counties to rack up a majority of the county unit votes.

In 1960, when the state was much more urbanized than it had been before World War II, rural counties which accounted for only 32 percent of

the state’s population accounted for 59 percent of the county unit votes. The combined county unit vote of the state’s three smallest counties, whose combined population was 6,980, equaled that of its largest county, Fulton, whose population was 556,326. A 1962 lawsuit brought an end to this system. In the 1946 general election, Gene Talmadge, who the Republicans ran nobody against, was elected governor. He died before he could be inaugurated in 1947. Talmadge’s son, Herman, whose name 675 of Gene’s supporters concerned about Gene’s poor health had written in on their eneral election ballots, claimed the General Assembly could name him governor because he had received, once some additional write-in votes were discovered, the second highest number of votes for governor.

The General Assembly elected Herman Talmadge governor. Arnall did not think the General Assembly had the right to do this, and that he automatically became governor for four more years unless he resigned. One night Talmadge supporters changed the locks on the door to the governor’s office so Arnall could not enter it. When Talmadge mustered in the national guard, a federal agency, to bar Arnall from the Capitol building, Arnall mustered in the state guard, a state agency. State Troopers kept Arnall from entering the governor’s mansion.

Back in the 1920s, after Herman’s father was elected commissioner of the Georgia Department of Agriculture, some of its executives he fired refused to vacate their offices. Gene had them forcibly removed from their offices and installed new locks on the doors. In a 1986 interview, Arnall said that “when I was barred, rather than having a shoot-out war there,” he set up the executive office in his law office in the Candler building.

When the Atlanta bank which held the state’s funds refused to honor checks he wrote, he told its president “I’m going to get on a statewide radio hook up tonight…and I’m going to announce that your bank is insolvent.” (Hopefully this terribly irresponsible threat was a bluff.) The bank caved. “I had no desire,” Arnold said, “to continue as governor for four more years. I couldn’t because I had signed lecture contracts all over the United States, and so I made more money lecturing than anything I’ve ever done. I wrote books, and the books sold the lectures, and the lectures sold the books.”

Arnall resigned, which he believed would make M. E, Thompson, who had been elected Georgia’s first lieutenant governor, acting governor.Arnall and Thompson, who had been his revenue commissioner, were close. However, the General Assembly named Herman Talmadge governor. Because Georgia’s Supreme Court agreed with Arnall that it had no right to do this, Thompson became governor. In 1948, a special election replaced Thompson with Herman Talmadge. The three-governor fiasco caused the rest of the nation to ridicule Georgia for behaving like a banana republic.

Arnall observed that, “because of my position on the race issue, fighting for first-class citizenship for all he people, while I was tremendously popular in the West and North, to the same degree, I was unpopular in the South because I was an apostate, in their view, because when I spoke about the black men having the right of franchise and equal treatment.”

“My Talmadge friends,” Arnall told the University of West Georgia

history professor who interviewed him in 1986, “and the honorable opposition played into my hands in that they made me a national figure overnight, and I made more money.” 1952, President Truman made Arnall the head of the Office of Price Stabilization.

 See http://oldlibrary.westga.edu/~library/depts/gph/coneagov2.shtml.

A decision he made there set off a chain of events which resulted in President Truman seizing the nation’s steel mills, an action the Supreme Court declared was unconstitutional. Arnall explained that the Office of Price Stabilization “controlled the economy of America. You couldn't sell a package of cigarettes without us telling you what you could sell it for, putting a ceiling on it. And it was the most interesting job I ever had because it was the easiest job. All you had to do was say no. But you had to do it sweetly and politely and nicely.” From 1948 to 1963 Arnall was the president of the Society of Independent Motion Picture Producers. Among those he dealt with were Walt Disney and Ronald Reagan.

The General Assembly has only elected a governor twice. The first time was when it elected Herman Talmadge. The second time was in 1966 when Ellis Arnall caused no candidate to receive a majority of the votes in the general election. Arnall, who had been a member of the General Assembly and attorney general before being elected governor, did not run for office again until 1966, when he, Lester Maddox, Jimmy Carter, and James Grey, ran for governor in the Democratic primary. Previously Maddox had failed to be elected mayor of Atlanta. Arnall and Maddox were forced into a run-off to determine which of them would run for governor in the general election. Maddox won.

Although Republican Howard “Bo” Callaway got the most votes in the general election, thanks to a number of voters writing in Arnall’s name, he did not obtain a majority of the votes; thereby turning it over the Democrat-controlled General Assembly to select the governor. It selected Maddox, who had received a lot of publicity throughout the nation for pushing blacks away from his Atlanta restaurant with an ax handle.

Arnall preferred that Maddox be elected because “I knew that Maddox would be an honest governor. He had no connections. He had no knowledge about how to get anything done, so I knew he couldn’t get any laws through that would damage the state in any way.”